The Bank of Valletta has appointed a special committee to look into cryptocurrency, chief executive officer Mario Mallia announced on Thursday, adding however that trading in such currencies was not yet accepted by the bank.

Speaking during the BOV’s annual general meeting, Mr Mallia however said that the bank would not be “burying its head in the sand” and acknowledged cryptocurrencies as “something real”.

“BOV currently does not deal in cryptocurrencies and it is not accepting any transactions. But cryptocurrencies, love them or hate them, are something real.

“We need to draw up a strategy and in fact we have appointed a committee to develop our position. It needs to be studied better,” Mr Mallia said, adding that while aware of the Bill drawn up by the government, the bank would be taking this into consideration when it is made public.

READ: BOV turns against cryptocurrencies

Mr Mallia said that the bank would also be assessing how such currencies fit in the risk appetite of the bank, adding that before any measures are taken, there needed to be regulation.

“If we ever touch cryptocurrencies, we need to make sure they are regulated as they are not at the moment and they need to also fit in the risk appetite of the bank. We are not comfortable at the moment but this is a situation that is constantly revised,” Mr Mallia said.

BOV surprised cryptocurrency investors last November when it started blocking all transfers to cryptocurrency exchanges without any prior warning. Digital Economy junior minister Silvio Schembri subsequently said he believed the bank's decision was a "short-term" one

Cryptocurrency exchanges allow people to buy virtual currencies and users can transfer fiat money, such as Euro or US dollars, to their account and then use that money to buy cryptocurrencies such as bitcoin, etherium and others.

Although bitcoin is the most recognisable and publicised cryptocurrency, more than 1,000 such currencies are in circulation.

Bank's 2020 strategy

The CEO also outlined the financial performance for 2017 before moving on to BOV’s Vision 2020 strategy which includes long-term sustainability, good governance, business model revision and resourcing. 

“A cornerstone of Vision 2020 is the implementation of the bank’s Core Banking Transformation programme that will see it not only replacing its core banking system, but also overhauling its processes with a view to becoming more efficient and seamless across different channels,” he added. 

“This vision will enable the bank to digitalise itself, whilst ensuring that the customer remains at the core of its strategy.”

Also speaking during the AGM, chairman Deo Scerri referred to BOV’s €174.7 million profit for 2017, attributing the result to the “successful implementation of the bank’s strategy.

Mr Scerri said the bank’s capital base will enable it to continue with its plans to grow by investing in four key areas – IT, human resources, digitalisation and multi-channel banking. 

Five resolutions were approved during the meeting, including the approval of the Profit and Loss Account and Balance Sheet for the year ended December 31, 2017, the final gross dividend and the reappointment of the bank’s auditors.

Approval was also obtained for the ratification of the amendment in the bank’s Memorandum of Association regarding the change in the Issued Share Capital which, following the Rights Issue, stands at €525 million.

The shareholders also approved changes to allow large shareholders holding more than five per cent of the bank’s issued share capital to dispose of their shareholding to a broader sector of the market.

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